CALGARY – The British Columbia government this morning announced a major stimulus program to kick-start its oil and gas industry, including a package of royalty incentives and legislative changes.

In a statement, the government said the program is designed to produce “immediate economic benefits” for the province.

“B.C. is one of the most competitive oil and gas jurisdictions in North America, and this stimulus package will further strengthen the sector while increasing provincial revenues,” said provincial energy minister Blair Lekstrom. “In this day and age capital investment is very fluid and we want to encourage the oil and gas sector to invest in British Columbia.”

The package includes four royalty and two regulatory initiatives including:

A one-year, two per cent royalty rate for all wells drilled in a 10-month window from September 2009 to June 2010.

An increase of 15 per cent in existing royalty deductions deep gas drilling.

Qualification of horizontal wells drilled between 1,900 and 2,300 metres into the deep royalty credit program.

An additional $50 million allocation for the Infrastructure Royalty Credit Program to be offered this fall to stimulate investment in oil and gas roads and pipelines.

Regulatory initiatives amendments to the drilling licence regulation to create flexibility that will allow industry to move wells to production while not losing privileges to convert drilling licences to leases.